AgencyIntermediateCalifornia Exam

The duty of 'obedience' in a fiduciary relationship means an agent must:

AFollow all instructions from the principal, even if illegal
BFollow all lawful instructions of the principal, even if the agent disagreesCorrect
CAlways agree with the principal's decisions
DObey the instructions of both principal and third parties

Why Follow all lawful instructions of the principal, even if the agent disagrees Is Correct

Answer B: Follow all lawful instructions of the principal, even if the agent disagrees

The duty of obedience requires the agent to follow the principal's lawful instructions faithfully. However, an agent is never required to follow illegal instructions — doing so could result in personal liability and license discipline.

Exam Tip: Agency

Agency questions are among the most tested on the exam. Focus on the difference between client and customer, and memorize the fiduciary duties (OLD CAR). Watch for questions that try to blur the line between a general agent and a special agent.

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